#29 Modern Monetary Theory (MMT) - The Gamechanger

In this episode I get to speak to one of the UK's brightest economic thinkers, economist, and central-bank specialist, Mr Dario Perkins, Managing Director of Global Macro, TS LOMBARD, the Global Investment think tank, with 30 years experience on key issues in Economics, Politics and Markets.  The two main topics of discussion in this conversation are INFLATION and MODERN MONETARY THEORY (MMT) Inflation - do you understand it, what does it mean, and why is it important?   Dario spells all of this out in his very easy to follow way, breaking it down for us, allowing us to grasp the fact that when government's talk about inflation, it's really the sustained increases in prices they are looking out for.   In his view there is alot of noise around at the moment, all supply and demand related.  Most of this makes sense, with the idea being it should all settle down, as economies and the pent up demand across a range of sectors evens itself out, over the rest of this year. There is a very smooth transition into explaining MMT, and why that could be the game changer for society right now.   This MMT discussion really is fascinating to watch and play out across the world, as it seems to me there are two groups of economists in the world today(just to try and keep things simple). Those of the more traditional economic mindset, who remember made an absolute mess of the 10 years (referred to as the lost decade) post the last Global Financial Crisis in 2008, and then those who see economics through a different lease, where they don't actually believe that deficits and governments borrowing money is the real story and all that interesting.   I talk about one of the US leading economist's Stephanie Kelton in this conversation a few times, as she has written an excellent book which I recommend "The Deficit Myth". There are a couple of key points to understand, but one fundamental one being that for those countries that are issuers of their own currency, like the US, UK and Australia, then you should never be in a position where you would have to default and you can also set your own interest rates.   In essence what MMT does is to provide the tools and software for these countries to try and fix some of the huge problems facing it like climate change, infrastructure and inequality, by providing governments fiscal space to provide for more expansive fiscal policy. Dario shares his veiw on what Biden is doing with MMT (Bidenomics) in the US right now, borrowing billions of dollars to drive the recovery there.  In the EU it looks like they are also going in that direction but Interestingly Dario feels that if BJ is going to remain in power in the UK, he will have to follow suit. I hope you enjoy this conversation and get some value from it.   As ever all feedback, greatly appreciated. Finally If you have a minute, I would be really grateful for a review wherever you get your podcasts and if you share this with one other person. Have a great weekend all, and look after yourself and each other. CD